Gold prices experienced a notable rally during the mid-North American session on Monday, with XAU/USD trading at $2,467 after a rebound from a daily low of $2,423. This surge, surpassing 1%, was primarily attributed to the retreat of US Treasury bond yields in anticipation of key economic data releases in the United States.
Market participants are eagerly awaiting the latest Consumer Price Index (CPI) report for July, which is anticipated to reveal improvements in the disinflation process. The shift in sentiment towards gold was also influenced by ongoing developments in the Middle East, particularly the lack of progress in ceasefire negotiations between Israel, Lebanon, and Iran, fueling concerns of a potential escalation in the conflict.
The decline in US Treasury bond yields, notably a four basis points drop in the 10-year benchmark note rate to 3.902%, further bolstered the appeal of gold as a safe-haven asset. Alongside these factors, Federal Reserve Governor Michele Bowman’s neutral stance, emphasizing the importance of progress on inflation based on recent data trends, added to the market dynamics driving the surge in gold prices.
Looking ahead, the economic calendar in the US is set to deliver a series of significant data releases throughout the week. Tuesday will bring the unveiling of US inflation figures, followed by additional inflation data on Wednesday. Thursday’s focus will shift to Retail Sales data, while Friday will see the release of the University of Michigan (UoM) Consumer Sentiment report, offering insights into consumer confidence levels.
The combination of geopolitical uncertainties, economic data anticipation, and shifting market sentiments underscores the complex landscape influencing gold prices and broader investor behavior as the week progresses.
